Political feud causing budgetary delays . . .
The much anticipated release of the fiscal year 2020 budget in Bangkok has suffered another setback. A political feud within the pro-military coalition government has cast a dark cloud over the prospects of economic growth, dampening the hopes of economic revitalization following the March 2019 election. At the heart of the dispute is a falling-out between members of two leading political parties in the ruling alliance over the issue of members of the coalition government violating voting rules in their own vested interests.
Consequences of the budgetary delay . . .
Delays in passing the 2020 budget is taking its toll on Southeast Asia’s second-largest economy, which grew by only 2.5 per cent in 2019. As such, the new year will continue with the sluggish pace of economic growth. Thailand is in desperate need of the financial disbursements the budget represents. The money is required to promote investment in the Thai economy, fund more than 200 projects in various private sectors, and support poverty-reduction initiatives, including a welfare program envisioned by the previous military government to support 11 million poor.
Coronavirus exacerbating the situation . . .
Budgetary delays, coupled with the impacts of the coronavirus, has compelled Thailand’s Ministry of Finance to cut the 2020 GDP forecast from 3.3 per cent to 2.8 per cent. Meanwhile, the country’s sizable tourism industry has been hit hard by the coronavirus outbreak. The industry employs around six million Thais and contributes 22 per cent to Thailand’s GDP. Of the 39 million tourists who visited Thailand last year, 11 million were from China. And as of today, 14 domestic cases of the virus have been detected. The revival of the Thai economy will depend on a speedy resolution to the current political dispute, and quick and effective containment of the coronavirus outbreak.
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- Asian Nikkei Review: Thailand's budget delay seen exacerbating economic woes
- Bangkok Post: Budget bill passage put on hold
- The Straits Times: Thailand cuts 2020 economic growth forecast amid Wuhan virus spread
